Sri Lanka grants China an exclusive investment zone

Sri Lanka granted a special investment zone exclusively for Chinese companies to bring much needed foreign investments into the country, a state owned television service in Colombo announced.
China’s Huichen Investment Holdings Limited will manage and bring new investments into the Mirigama zone, some 55 kilometers (34 miles) north of Colombo, for a period of 33 years, officials said.

Over the next three-years, Huichen will invest 28 million dollars to develop roads, power and sewerage facilities in the zone, said Investment Promotions Minister Anura Priyadharshana Yapa.

“This is the first time the government has given a foreign country a specific area to develop and attract foreign investments into the country,” Yapa told reporters.

Huichen’s president, Huang Yuping, said nearly 30 Chinese firms involved in manufacturing and IT-related services had shown interest in setting up operations at the Mirigama zone.

With the end of its long-running war with ethnic Tamil Tigers, Sri Lankahas set its sights on attracting one billion dollars in foreign investment this year, Yapa said.

Chinais an increasingly key military and political ally. Beijinghelped block a resolution censuring Sri Lanka for its handling of the final stages of the war against Tamil Tigers last month and is a main supplier of small arms to the South Asian nation.

Sri Lankaattracted 800 million dollars in foreign investments last year, mostly into IT and telecoms-related sectors.

“With the war over, we have seen a lot of interest from companies to invest in areas like power, telecom, tourism, agro-processing, fisheries, education and IT services,” Yapa said.

He said the government plans to carve out economic zones in the former war-scarred northern town of Kilinochchias well as eastern areas of Trincomalee, Batticaloa and Ampara.

“In the north and east, we are looking at boat-building, fisheries, housing and tourism projects. There is also scope for infrastructure projects to rebuild areas once destroyed by the war,” he said. – (AFP)